Morgan Stanley: Supply-Demand Dynamics and Macro Risks Behind the Largest Bond Boom in Recent Years

Morgan Stanley's fixed income research team discussed the largest wave of bond issuance in recent years in its "Thoughts on the Market" column. Investment-grade bond issuance has grown by nearly 25% year-over-year, driven by AI capital expenditures and a recovery in M&A activity, with $100 billion in new capital flowing into the investment-grade credit market. The team also noted diverging pressures in the high-yield bond market, which will jointly influence credit market trends over the next 6 to 12 months.